Fifty-four apartments in the South Village development at Kirrawee are being sold to an investment company for about 30 per cent below peak sale prices.
Development company Payce has negotiated a deal with Moelis Australia to sell all the units in Vision, a six-storey building in Flora Street, next to where a new park will be built, for $28.5 million.
Moelis is seeking investors to finance the purchase of the apartments, which will initially be rented, with consideration given to their sale in the future.
The prospectus said the purchase price was a discount of about 30 per cent on peak prices at South Village and 20 per cent below those achieved in 2019.
The price reflected the fact the apartments were being sold together in one-line, the document said.
A spokesman for Payce confirmed the agreement.
"The block includes 29 one-bedroom, 24 two-bedroom and one three-bedroom units," he said.
"The sale price is comparable to selling the units individually on the open market when all selling costs are included.
"These costs include GST, agent commissions, marketing costs, holding costs and buyer incentive offers."
The apartment block is the only one of seven in the development on the former brick pit site that Payce had to sell on completion.
Co-developer Deicorp had the remainder.
Deicorp's development manager John Vamvakaris said, what Payce chose to do with their 54 apartments was a matter for them.
Mr Vamvakaris said he understood the sale price was because the apartments were being sold in one line.
"Our apartments are selling very well," he said.
"About 600 have been sold to date, with about 180 to go.
"The local market has received the project very well.
"The apartments are well priced and mostly being bought by first home buyers.
"We have not had to adjust prices."
Mr Vamvakaris said building was expected to be completed in July.
The Moelis Australia prospectus said rental income from the apartments was expected to grow at a rate of 3.5 per cent a year.
The document said South Village was "the first significant residential project in recent times and its scale is expected to lead the gentrification of the area".
"A further 757 apartments within projects of greater values than $20 million have been approved for development within a six kilometre radius and population is expected to grow by about 18 per cent (4000) by 2025," the document said.
The prospectus was upbeat about a revival in the housing market.
"The residential market in Sydney peaked in July 2017 and is currently 22 months into the down cycle," the document said.
"The longest period of time it took any previous downward cycle to reach the bottom was 28 months.
"Sydney residential property prices are now down 14.5 per cent from their peak the largest previous decline was 11.6 per cent between 1988 and 1991.
"Unlike previous housing price downturns that were heavily influenced by high interest rates, the recent downturn is heavily influenced by the ability of prospective owners to obtain financing.
"Lending restrictions imposed by APRA (Australian Prudential Regulation Authority) and ASIC (Australian Securities and Investments Commission) have curbed investor demand for residential real estate.
"Financing restrictions appear to be easing as APRA returns control over minimum interest rate serviceability buffer back to the lender's discretion.
"This is anticipated to result in an increase in borrower's access to acquisition finance."
The prospectus said new housing completions were outpacing starts, and new approvals had dropped since December, 2018.
"If the population continues to increase, (it increased by about 400,000 in 2018) current excess supply should be absorbed over time.
"At 2.5 people per dwelling, about 400,000 population growth creates a need for about 160.000 dwellings."
